Beijing Tongtech (SZSE:300379 investor three-year losses grow to 70% as the stock sheds CN¥646m this past week

The truth is that if you invest for long enough, you're going to end up with some losing stocks. But the long term shareholders of Beijing Tongtech Co., Ltd. (SZSE:300379) have had an unfortunate run in the last three years. Regrettably, they have had to cope with a 70% drop in the share price over that period. And over the last year the share price fell 63%, so we doubt many shareholders are delighted. The falls have accelerated recently, with the share price down 38% in the last three months.

If the past week is anything to go by, investor sentiment for Beijing Tongtech isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Check out our latest analysis for Beijing Tongtech

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Over the three years that the share price declined, Beijing Tongtech's earnings per share (EPS) dropped significantly, falling to a loss. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. However, we can say we'd expect to see a falling share price in this scenario.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into Beijing Tongtech's key metrics by checking this interactive graph of Beijing Tongtech's earnings, revenue and cash flow.

A Different Perspective

While the broader market lost about 10% in the twelve months, Beijing Tongtech shareholders did even worse, losing 63%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 6% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Beijing Tongtech (at least 1 which is potentially serious) , and understanding them should be part of your investment process.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.